GUYANA

GUYANA

Energy Department

Minister of State, Joseph Harmon, in response to whether his responsibilities were being reduced, reiterated that he only has reporting functions on the oil and gas sector to the National Assembly but that does not diminish government’s priority on the emerging industry.

He assured companies that they were not being treated with less importance because they would no longer meet a Minister. “It’s unfortunate though, … that when companies are told that they must speak to a Director they feel .. they are being given a lower priority and it’s important that this being a new entity that we establish .. the authority of the entity .. .. the President has reinforced that this is a new department of government .. we have to work assiduously to ensure that it is given that authority and that scope that is required by us.”

Dr. Mark Bynoe head of the Department of Energy has been meeting stakeholders as steps are being taken to overhaul existing laws, regulations and policies for the hydrocarbon sector and enact new ones.

Harmon’s gazetted ministerial portfolio is the petroleum sector but he is not required to meet oil company executives. “In the way in which our Official Gazettes are published ..with ministerial responsibility that all of these issues, which fall under the President and the Ministry of the Presidency, will be published under my name so that I will answer to those issues in the National Assembly.”

Even before the Presidentr had written to the executives of oil companies, he had also informed them about his responsibility. “I had written to all of the companies, including the international banks and some foreign countries, indicating.. that the Department of Energy was established on the 1st of August 2018 and that all issues in relation to oil and gas were to be referred to that entity under Dr. Bynoe.” The State Minister recalled first addressing his responsibility in September, 2018 when he announced that President Granger had established the Department of Energy of the Ministry of the Presidency and “the entity would report directly to His Excellency who would exercise personal supervision over it”.

In September, 2018 it had not been made clear that he would not be meeting with oil and gas executives.

The Minister of Foreign Affairs corroborated that fact as has been stated in President Granger’s letter to oil companies which states that the Minister of State is responsible for reporting on the sector to the National Assembly and holding public sector and stakeholder engagements.

“The establishment of the Department means that, as President, I now have responsibility for petroleum pursuant to the Petroleum Act. I am directly and solely responsible for approving exploration and production licences, work plans and local content plans; decommissioning and monitoring and adjudicating, where appropriate, compliance with the laws and regulations, inter alia, of the Cooperative Republic of Guyana,” Granger says in his letter .

The oil and gas sector was shifted from Minister of Natural Resources, Raphael Trotman to the President earlier ahead of the now established Department of Energy.The Minister of Business signed a three-year Agreement of Cooperation on oil sector development at the Ministry of the Presidency with the Minister of Natural Resources of the Canadian province of Labrador and Newfoundland, Siobhan Coady.

No special favours for oil and gas businesses-

The government ruled out granting “special favours” to oil and gas companies and assured investors that the administration was not corrupt.

Addressing a 50-member trade and investment delegation from the Canadian province of Newfoundland and Labrador, Head of the Department of Energy, Dr. Mark Bynoe cited the need for predictability as an essential ingredient for the private sector to plan and decide properly by knowing what the rules are, calculable probability outcomes and associated risks.

Predictability should not be interpreted as a means by which businesses would receive special treatment. “The Department will continue to honour its obligations but it will be firm and consistent with application of the requisite laws. It does not mean that being predictable guarantees anyone or business any special favours but rather it aims to level the proverbial playing field and allow the private sector to take appropriate risk to garner acceptable rates of returns,” Bynoe told the audience that included Canada’s High Commissioner to Guyana, Lilian Chaterjee, Britain’s High Commissioner to Guyana Greg Quinn, top Guyana government officials and senior private sector representatives at the Canadian envoy’s residence.

The Department of Energy would not be rushing to take advice from experts unless there is sufficient evidence. “The Department is mindful that it will be receiving advice from many expert. It will not, however, be encouraging government or even the private sector to pursue such advice even if they may be well-intentioned. Our decisions will be based on evidence-based facts and cogent information available.”

His entity has begun streamlining the oil and gas sector to focus on efficiency, transparency, predictability, balance and evidence-based decision-making. Government was interested in joint ventures to exploit mid and downstream opportunities while raising local business standards and increasing their competitiveness. Government was stressing transparency and efficient and effective management of the sector through the crafting, revision, piloting and enactment of legislation for the petroleum commission, local content and the sovereign wealth fund.

The Minister of Business, told the Canadians that government has to ensure Guyanese benefit from oil discovered offshore. Guyana does not have an extremely corrupt government and private sector or docile population that would see ordinary people not benefiting from the oil and gas sector. Foreign companies would not be allowed to exploit Guyana cheaply. “I can assure you that situation does not exist in Guyana and I believe it is important that I assure you of that, especially our guests …. We don’t want foreign companies to come to Guyana believing that this is a free-for-all and that our entire country can be bought. We want you to come .. with a very clear understanding that this is a good place to do business, a clean place to do business, a profitable place to do business and a secure place to do busines.”

Transparency and accountability activists chastised government for negotiating a US$18 million signature bonus with ExxonMobil only after the discovery of the Liza Well that would produce about 120,000 barrels per day from early 2020. With the discovery of eight other wells, daily oil production is expected to soar to 750,000 barrels. The Guyana government and the Canadian province of Newfoundland and Labrador earlier signed an agreement to facilitate an exchange of experiences and explore business and training opportunities in the oil and gas sector.

OBITUARY

Milton M. Drepaul, 1944-2018

Over five decades, Mr. Drepaul taught in Guyana, Jamaica, Turks & Caicos, Anguilla, Barbados, Trinidad & Tobago, and Suriname. He was head of the Guyana Information Service (GIS) and established the first national television station in Guyana GTV 10, forerunner of the current NCN Television. He was Senior Lecturer in the College of Agriculture, Science and Education in Jamaica, Senior English Lecturer at Knox College, Deputy Registrar for Syllabuses for the Caribbean Examination Council (CXC) – Barbados; Senior Lecturer and Deputy Principal at the Lillian Dewar College of Education (Guyana); Senior Lecturer at the Caribbean Institute of Language Studies (CARINLANGS, Suriname), and Lecturer in English & Research Writing at the Suriname Institute of Management Studies in Paramaribo.

Eco Atlantic farmout of Orinduik Block to Total 

Eco (Atlantic) Oil & Gas, the oil and gas exploration company with licenses in highly prospective regions in Guyana and Namibia, announced that, further to the Company’s announcement of 13 September 2018, the , President of Guyana and the Minister Responsible for Petroleum, approved the transfer of the 25% working interest (‘WI’) in the Orinduik Block, offshore Guyana, from Eco Atlantic (Guyana), a wholly owned subsidiary of the Company, to Total’s subsidiary company Total E&P Activités Pétrolières.

Highlights:

• Transfer of 25% WI in Orinduik from Eco to Total approved by President of Guyana
• Total to transfer Eco USD$12.5m in exchange for WI
• Eco therefore fully funded for current 2019 drill programme on Orinduik

In September 2017, Total acquired, for USD$1.0 million paid to Eco, an option to farm into a 25% working interest in Orinduik upon delivery of processed 3D data from the 2,550 km2 survey shot on the block by Eco and its operating partner Tullow (60%) (the “Option”). On September 12, 2018 Total exercised its right to acquire the 25% WI from Eco, and with government approval now having been received for the transfer, Total will now shortly pay Eco an additional USD$12.5 million cash consideration in accordance with the Option.

Following the formal completion of the transaction, the WI on the Block will be: Tullow 60% (Operator); Total 25%; Eco 15%.

Colin Kinley, Chief Operating Officer of Eco, stated:

‘We are pleased to have received approval from President Granger so promptly after submitting all of the requested transfer documents. The new team in the Ministry were thorough and effective in this swift and timely approval process and this allows the Orinduik partners to next focus on our 2019 drilling program.’

Gil Holzman, Chief Executive Officer of Eco, commented:

‘We are very glad to be able to move ahead so effectively and swiftly in Guyana, significantly ahead of our committed licence schedule. We are thankful to the Guyana authorities and the honourable President for their approval to allow us to bring Total into the block. Eco’s team brought Orinduik to the table prior to the first ExxonMobil Liza discovery, deeming the block to be a high-graded opportunity, selected from multiple basins we had researched and evaluated around the world. We are delighted to see Orinduik maturing into what has the potential to be a large-scale field. Following the joint signature of the Petroleum Agreement with Tullow, and now with Total’s Option exercise, our belief in the prospectivity of the Block and our strategy to partner with world class oil companies is only strengthened. We look forward to drilling at least one well on Orinduik alongside our partners in 2019. With the USD$12.5m that we will now receive from Total, and together with our current strong cash position we are fully funded for our drilling programme.’

Total

In September 2017, French oil company Total paid $1.0 million to Eco for an option to farm into a 25% working interest in Orinduik upon delivery of processed 3D data from the 2,550 km2 survey shot on the block by Eco and its operating partner Tullow (60%).

Total in September exercised its right to acquire the 25% WI from Eco, and with government approval now having been received for the transfer, Total will now pay Eco an additional $12.5 million cash consideration in accordance with the option. The cash will provide Eco with the means to fund a part of the drilling program that will be carried out in the block in 2019.

A competent persons report (CPR) on Tullow Oil’s Orinduik block offshore Guyana recently identified 2,9 billion barrels of oil equivalent of P50 (best estimate) reserves. Eco Atlantic in September said that the first-ever CPR on the Orinduik block was prepared by Gustavson Associates LLC. The company added that the 2,9 billion boe were identified across a total of ten leads.

Georgetown Chamber of Commerce and Industry

A delegation from members of the GCCI will be heading to the oil city of Aberdeen, Scotland in a quest to develop business relations in oil and gas.

President of the GCCI, Deodat Indar told a press conference at the Waterloo Street, Georgetown head office that the Trade Mission will be from November 25 to November 30. The GCCI intends this to be the first of many visits to the UK with the same focus. This remarkable initiative will help businesses to enter other avenues to bring about growth, in a feasible manner. If one company in Guyana had to go up there (to Scottland and) sort out a partner (and) evaluate that partner it would take a long and hard process and it will cost that company a lot of money and these missions are there to ease out all of that and make that to some extent not needed. The head of the private sector organization also noted how expectant he is of agreements being signed during that visit to bridge the gap between the countries.

Vice President of the GCCI, Nicholas Boyer explained the importance of the trip, while noting that the Trade Mission became a reality after the GCCI engaged the British High Commissioner and the Guyanese High COmmission in the UK. Aberdeen is an impacting city within the oil and gas sector in the UK. Guyana needs to reach out to other countries that have the experience in that sector, if the country is to flourish from its earnings. GCCI intends to have its members connected to the foreigners who are well schooled in the area and interested in setting up partnership through the transfer of technology and skills to promote local growth and capacity.

The British High Commissioner pointed out that the city has a long history of which Guyana can learn from although it too, made some mistakes.

“The visit has got several aspects to it and one is to allow us to connect business to business links, not just in the oil industry, but in other areas as education and such like culture. It will allow the educational industry in Aberdeen to reach out to the educational institutions here and it will allow us to build a relationship I hope between the Aberdeen Council and the City Council back here.”

TechnipFMC awarded subsea contract for ExxonMobil Liza Phase 2 project

TechnipFMC has been awarded a contract by an affiliate of ExxonMobil for the engineering of the subsea system for the proposed Liza Phase 2 project.

Following engineering and subject to requisite government approvals, project sanction and an authorization to proceed with the next phase, TechnipFMC will then manufacture and deliver the subsea equipment. Delivery would include 30 enhanced vertical deep water trees and associated tooling, as well as eight manifolds and associated controls and tie-in equipment.

‘We are very pleased that ExxonMobil has selected TechnipFMC to commence engineering for the Liza Phase 2 subsea equipment. We share ExxonMobil’s values of collaboration, trust, and overall commitment to operational excellence and the successful long-term development of the project,’ said Doug Pferdehirt, CEO of TechnipFMC.

In support of this project, TechnipFMC will continue hiring and training Guyanese engineers.

The Liza Phase 2 development is located approx. 193 km (120 miles) offshore Guyana on the Stabroek Block with water depths of 1,500 m (4,900 ft) to 1,900 m (6,200 ft). ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL), is the operator.

Liza Phase 1 involves the conversion of an oil tanker into a floating, production, storage and offloading (FPSO) vessel named Liza Destiny, along with four undersea drill centers with 17 production wells. Construction of the FPSO and subsea equipment is under way in more than a dozen countries. Liza Destiny will have a production capacity of 120,000 barrels of oil per day.

A second FPSO with a capacity of 220,000 barrels per day is being planned as part of the Liza Phase 2 development, and a third is under consideration for the Payara development. ExxonMobil has already submitted an application for an environmental permit to develop the second phase of Liza with start-up expected by mid-2022.

Source: TechnipFMC

Petroleum collaboration

THE Government of Guyana and the Government of the Province of Newfoundland and Labrador signed a Memorandum of Understanding (MoU) paving the way for increased collaboration in the Oil and Gas Industry.
The new agreement sets the platform for Guyana’s Department of Energy and the Department of Natural Resources in Newfoundland and Labrador to collaborate in the areas of supply chain development, joint ventures and exchanges, knowledge transfer, technology development, training and health, safety and the environment.
The MoU was signed at the Ministry of the Presidency by Minister of Business Dominic Gaskin and Newfoundland Minister of Natural Resources Siobhan Coady in the presence of the Canadian High Commissioner to Guyana, Lilian Chatterjee.
Director of the Department of Energy (DoE), Dr. Mark Bynoe; Newfoundland and Labrador Deputy Minister of Natural Resources, Gordon McIntosh; and Provincial Trade Commissioner to the Latin America and the Caribbean, Bob Norman were among the officials that witnessed the signing of the MoU.

With Newfoundland and Labrador’s Offshore Oil and Gas Industry in its 20th year of production, the Canadian Minister said there is much to offer Guyana as it prepares for the production of oil in 2020. Minister Coady noted that during its early years of exploration and production Newfoundland and Labrador depended heavily on joint ventures to develop, and now it is open to partnering with Guyana. “We are here today to work with you, to give you the experiences that we have so that you can build and grow…We look forward to seeing the growth and development of the Oil and Gas Industry here in Guyana and the benefits coming to this great country.”

Minister Gaskin told reporters that it is important to develop long term relations and partnerships with other governments and organisations as it develops its Oil and Gas Industry. “It is important for Guyana that we do develop long term relations and partnerships with partner governments. As we explore the oil and gas sector, with which we are not too familiar, I think it becomes all the more important that we benefit from the experiences of those who have done this before.”

Under Clause One of the MoU, which has a lifespan of three years, states, the parties will facilitate economic cooperation and business opportunities in Guyana and in Newfoundland and Labrador by organising reciprocal visits to the other jurisdiction that include representatives of industry and government.

To ensure the implementation and success of the agreement; a Joint Working Committee would be established with the Deputy Minister of Natural Resources, Newfoundland and Labrador serving as the co-chair. Dr. Bynoe as the Director of the Department of Energy here will serve as the co-chair. The Joint Working Committee will be responsible for the development of an annual work plan, and would report to the two governments on progress made.

The agreement comes approximately one month after Guyana signed a MoU with Trinidad and Tobago for cooperation in the energy sector. Guyana and Trinidad have agreed to provide technical assistance in the areas of exploration and production of hydrocarbon resources; exchange information on public policies in the areas of regulation, administration and sovereign management of hydrocarbon resources and technology transfer; promote training and capacity building of technical personnel; development procedures to prevent and respond to operational accidents which may result in damage, environmental impacts and personal injury among other areas. The agreement with Newfoundland and Labrador also comes at a time when a large trade mission from that province is here in Guyana to foster partnerships with businesses here.

Canadian oil and gas pact

The government and Canadian province of Newfoundland and Labrador will be signing a technical cooperation agreement on oil and gas when Georgetown will host a 50- member trade mission from the territory seeking partnerships with local companies to tap the sector.

The High Commission of Canada said that Minister of Natural Resources from Newfoundland and Labrador Siobhan Coady will be signing a Memorandum of Understanding (MoU) on behalf of her province with the Government of Guyana for technical cooperation on oil and gas.

Minister Coady will also be attending events organised for the visiting trade mission from October 15th to October 18th, 2018.

The High Commission and the Province of Newfoundland and Labrador are collaborating with Guyana through GO-Invest to bring the Canadian oil and gas trade mission of approximately 50 persons from the province’s offshore oil and gas industry.

“Canadian companies are hoping to leverage partnerships with appropriate Guyanese businesses, and work with them to access opportunities in the oil and gas sector. Guyana presents world-class, deep-water petroleum prospects which offer business opportunities that align with Newfoundland and Labrador’s petroleum expertise and experience. The development of potential partnerships between the two jurisdictions could serve to build strong business relationships, transfer technology, and skills development to support the growth of Guyana’s offshore oil and gas industry.”

Newfoundland companies have been servicing Floating Production Storage and Offloading vessels for over 15 years. Companies from this province have been servicing rigs and drill ships for 40 years.

The experience of Newfoundland can be a great potential resource to Guyana in developing its offshore industry through working with experienced partners, such as government and private sector, suppliers and service companies. “This trade mission will expose Canadian companies to the market opportunities, investment regime and qualified local companies. .” Overwhelming local support for the trade mission highlights the willingness of Guyanese to partner with Canadians, due to the Canadian model of leveraging local partnerships through building partners’ capabilities to access together the opportunities in this nascent sector.

Toronto-based professor donates computers, books to schools, UG

A Canada-based Guyanese donated over 100 computers and books to schools in regions Two and Six and the University of Guyana.

Rita Persaud, a PhD Candidate at the Bellevue University in Nebraska, USA, a professor at the George Brown College, Toronto, and a Director at Evergreen College, Markham, Greater Toronto Area, with assistance from her peers, donated computers and books to six schools including UG.

Berbice High School, JC Chandisingh, Anna Regina Secondary School, Abram Zuil Secondary School and Cotton Field Secondary school – are located in regions Six and Two.

Persaud plans on sending more assistance to schools around the country.

The professor left Guyana in the 80s and spent the majority of her life in Canada but has always been closely connected to her home country. She previously taught at the Berbice High School.

“I .. used to be a teacher at the Berbice High School and obviously I know that they need resources .. the headmistress …mentioned that they needed … dictionaries…basic necessities. Why are the students not having pencils? .. I spoke to some folks .. in Canada and from the college I am teaching and we thought..we can send those things but we can also send .. computers.”

She .. drafted a letter to the chairperson of her school, Dr. Carolyn Youssef-Morgan, ..an expert in Psychological Capital, asking whether it was a good idea to donate some computers .. “from the kindness of my heart and the need of the people. She gave the go-ahead and I spoke with my employers at George Brown College and Evergreen College. I initially asked for five computers but they came back with over 100 computers for the schools and over 300 textbooks,” Persaud said. Donations were sent to the country in three shipments.

“The second shipment is cleared and we saw pictures of the computers at the schools in Essequibo and it is so wonderful,” she added, explaining that the first and third shipments, destined for Berbice, .. are expected to arrive shortly.

Persaud ..was able to meet with Foreign Affairs Minister Carl Greenidge, who was able to liaison with the Ministry of Education to ensure that the computers were delivered to the schools.

300 text books were also sent to the University of Guyana. The idea to send books came from her boss at George Brown College, Dr. Elizabeth Sprees.
She said I should try sending some textbooks … I collected 300 text books that the University of Guyana should now receive.” She has since contacted the Chancellor and Librarian.

The first shipment featured donations from several persons while the majority of the second shipment and the entire third were self-funded.

“ I invited folks who donated to pack the shipments. It is wonderful to support the students in Guyana.” She wants to thank all the staff from the George Brown College, Bellevue University, Greentec and Tennesse Shipping, the community members and companies in Toronto, the United States of America, Sweden and former Berbice High School students who helped financially.

The Guyana Consulate in Toronto presented certificates of appreciation to the Evergreen and George Brown colleges.

Hess, Exxon Mobil Exploration

US giant Exxon Mobil and partners Hess Corp. and CNOOC Nexen Petroleum are making progress toward development of the hydrocarbon bounty discovered offshore.

“This month a second exploration vessel, the Noble Tom Madden, arrived to accelerate exploration and appraisal activities on the block starting with the Pluma prospect located 17 miles south of Turbot where we expect to spud a wildcat in early November,” Hess Corp. CEO John Hess said on the company’s third-quarter earnings call.

The well will target Upper Cretaceous reservoirs.

Exxon Mobil-led exploration effort led to nine discoveries. In August Exxon Mobil affiliate Esso Exploration and Production Guyana Ltd. struck oil in Hammerhead-1, opening a new play type and adding to the prospectivity of the Stabroek Block.

The discoveries, leading to a gross production of over 750,000 barrels of oil per day by 2025, are among the exploration bright spots for the industry which saw petroleum exploration budgets drastically slashed during the market downturn. The success offshore Guyana spurred interest from other companies seeking oil in the region.

Greg Hill, COO for Hess, said a successful flow test was recently completed at Hammerhead and additional appraisal activities are planned. Stena Carron rig that drilled the well will go to the Canary Islands for recertification before returning to the block in late December to spud a well on the Upper Cretaceous Amara prospect, about 24 miles southeast of the Turbot discovery.

Development of Liza Phase 1—sanctioned in June 2017—is moving ahead. First oil is expected by early 2020 with a nameplate capacity of 120,000 bbl/d of oil.

The larger Phase 2 development, with a capacity of 220,000 bbl/d, is also on track for startup by mid-2022. Phase 3 is currently in FEED with first oil expected in 2023.

Hess called the company’s position offshore Guyana “truly world class in every respect and transformational for our company.” Discovered recoverable resources for the Stabroek Block, in which Hess has a 30% stake, are estimated at more than 4 billion barrels of oil equivalent.

Guyana is one of Hess’ two main growth engines. The other is the Bakken where net production grew to118,000 boe/d during the third quarter, up from 103,000 boe/d a year earlier. “We forecast Bakken net production will increase to approximately 125,000 net barrels of oil equivalent per day and we expect to drill approximately 35 wells and bring 31 wells online bringing the total for full year 2018 to 120 wells drilled and 100 new wells brought online,” Hill said.

Hess also continues to test limited entry plug-and-perf completions and higher proppant loadings.

“Initial results are encouraging,” Hess said. The company added a sixth rig in the Bakken in September, and expects to generate annual capital production growth of between 15% to 20% through 2021, he said.

For the quarter, the New York-headquartered company reported net income rose to $52 million, compared with a net loss of $624 million a year earlier. The company also grew oil and gas production to a net average 279,000 boe/d, excluding Libya. The amount exceeded guidance and came as E&P capital and exploratory expenditures fell slightly to $542 million, down from $558 million a year earlier.

“We delivered another strong quarter of execution. With higher production and guidance and lower unit costs and guidance while keeping capital on exploratory expenditures flat with guidance for the year and generating a profit for the quarter,” Hess said. “We continue to execute our strategy to deliver capital efficient growth in our resources and production investing in the highest return projects to move down the cost curve and be profitable in a lower price environment with increasing cash generation and returns to shareholders.”